Ugandan Manufacturers Warn Power Tariffs May Raise Output Costs

By Fred Ojambo -
Dec 5, 2012

Ugandan manufacturers said further
planned increases in power tariffs will raise costs for
industrial consumers in the East African country.

Plans for automatic adjustments over the next seven years
based on foreign-exchange rates, inflation and fuel prices will
“translate into higher energy costs to industrialists,” the
Uganda Manufacturers Association, based in the capital, Kampala,
said today in statement published in the New Vision newspaper.

Uganda this year suspended electricity subsidies that cost
the country 1.53 trillion shillings ($569 million) since 2005
and said it will use the savings to finance public
infrastructure projects. Tariffs for large-scale electricity
users were increased by 69% to 312.8 shillings per kilowatt hour
in January, while household rates were raised by 36 percent.

Further tariff adjustments will impair the “private sector
planning since there is no certainty in costs of production,”
the association said.

Uganda’s Electricity Regulatory Authority has yet to
determine the margin by which energy costs will be increased
because it has yet to consult consumers and “evaluate the
proposals by stakeholders,” Julius Wandera, a spokesman for the
regulator, said in a phone interview today.

Uganda, East Africa’s third-biggest economy, has an
installed capacity of 810 megawatts of power, while peak demand
is estimated at 509.4 megawatts, according to the regulator.
Large-scale users, including cement, steel and beverage
producers, consume 43 percent of Uganda’s power, it said in
January.